Appellate Court Gives Malibu Voters A Harsh Lesson

There’s always a tension between the desire of California voters to control development and the constitutional limits on their ability to do so. Especially in desirable smaller cities, voters often want to control everything – and they sometimes want to use their initiative powers to control chain stores. But, as the residents of Malibu recently found out, it ain’t that easy. The Second District Court of Appeal just struck down Malibu’s Measure R – the so-called “Your Malibu, Your Decision Act,” which sought to micro-manage retail development with the express purpose of limiting chain stores and promoting local businesses. The measure was approved by 60% of voters in November 2014. But in affirming an earlier decision by Los Angeles County Superior Court Judge James Chalfant, the Second District provided Malibu with a pretty harsh dose of reality about the limits of ballot-box zoning. Measure R had two basic provisions: First, that any commercial development of more than 20,000 square meet must be considered via a specific plan process and sent to the voters. And second, that any chain retail store – defined as any store with 10 or more outlets – is subject to a conditional-use permit process that applies only to that chain. The Second District struck down both sections of the measure. On the face of it, the specific plan measure did have some measure of legitimacy. After all, specific plans are technically policy documents and therefore they are legislative acts subject to initiative and referendum. But the Second District concluded that the way the initiative was written, the mandatory specific plan process infringed on the city’s administrative decisionmaking powers, which are not subject to the ballot box. The city cited extensive case law showing that cities frequently adopt specific plans, which are then quite legally subject to voter approval. Nevertheless, the Second District ruled that the Malibu process was outside the bounds of legally permissible voter approval processes. “There is a difference,” wrote Justice Richard Aldridge for a unanimous three-judge panel, “between, on the one hand, voter approval of a specific plan and, on the other, requiring a city council to prepare a specific plan and report, to hold a public hearing about the specific plan and report, and then requiring the plan to be submitted to voters for approval. The former is a legislative act; the latter is an adjudicative one.” In particular, the court criticized the Malibu initiative for requiring very detailed specific plans for all commercial projects over 20,000 square feet while, at the same time, not creating any standards for those specific plans. “Measure R,” Aldridge wrote, “withdraws from Malibu’s City Council the ability to issue discretionary land use entitlements or permits concerning a development project—unless and until voters approve a specific plan for that project. In this respect, Measure R is really about project-by-project review—which would otherwise be subject to administrative, not voter, approval— in the guise of a specific plan.” The conditional use permit provisions of the initiative appeared to be an easier call for the appellate court. The initiative requires any chain store to obtain a CUP that theoretically runs with the land but is not transferrable from one business to another. “The meaning of these restrictions is undisputed,” Aldridge wrote. “The nature of the chain establishment is to be considered, and, once a chain, say Starbucks, obtains a CUP, the CUP can be transferred to another Starbucks but not to Peet’s, notwithstanding that Starbucks and Peet’s have the same “use,” i.e., both are coffee shops. Measure R CUPs thus are establishment-specific and restricted in their transferability.” And such a system is not permissible, Aldridge concluded on behalf of the court. “As much as one may believe that Starbucks and McDonalds and their ilk have become so ubiquitous as to constitute a generic land use, the City cites no authority to support such a proposition,” he wrote. “Starbucks is not a land use. ‘Coffee shop’ or restaurant is the land use.” The Case: The Park at Cross Creek v. City of Malibu, B271620, B275311 The Lawyers: For Park at Cross Creek: Marshall A. Camp, Hueston Hennigan, mcamp@hueston.com For City of Malibu: Christi Hogin, Jenkins & Hogin, Chogin@localgovlaw.com For initiative proponents as intervenors: Robin B. Johansen, Remcho, Johansen & Purcell, johansen@rjp.com

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